Aligned policy settings seen as key to unlocking Australia’s housing delivery

In a significant address at the National Press Club, Federal Housing Minister Clare O’Neil acknowledged Australia’s housing crisis as a result of decades of systemic failures. Her remarks have sparked a call for coordinated reform, with the Housing Industry Association (HIA) emphasising the urgent need for aligned policy settings to address the nation’s housing shortfall.

Jocelyn Martin, Managing Director of HIA, responded to the Minister’s address by underscoring the necessity of transforming policy and funding into tangible outcomes. “The priority now is turning policy and funding into outcomes – more serviced land, faster approvals and more homes. Coordinated action across all levels of government is now critical to turn ambition into outcomes,” she stated.

The Minister’s recognition of the multifaceted nature of the housing crisis marks a pivotal shift in the national conversation, according to Martin. “Acknowledging the housing shortfall stems from multiple, interlinked policy failures marks an important shift in the national debate,” she said. “Australia’s housing crisis is not the result of a single policy failure – and it will not be solved by a single reform.”

Martin elaborated on the complexity of the issue, noting that various factors have compounded over time to restrict housing supply. “Planning systems, infrastructure delivery, tax settings, workforce shortages, productivity constraints and regulatory burden have combined over decades to restrict housing supply,” she explained. “Decades of underperformance from all levels of government have contributed to the current challenges and highlights the scale of reform required.”

Fragmented decision-making across federal, state, and local governments has exacerbated the problem, making it increasingly difficult and costly to build homes. Martin emphasised the need for genuine coordination across these levels and with the housing industry itself. “Fixing this requires genuine coordination across governments and with the industry that delivers housing,” she stated. “Without alignment across planning, taxation and investment settings, infrastructure funding and delivery, supply will continue to fall short.”

In response to these challenges, the HIA has welcomed initiatives to bring together Housing, Planning, and Building Ministers as a step toward a more unified national approach. “Bringing jurisdictions together is essential. For too long there has been disjointed policy settings across Ministerial portfolios and too much finger pointing on who is to blame as opposed to a coordinated ownership of the problems and solutions,” Martin said.

The Federal Government’s significant infrastructure investment, including an additional $2 billion announced in the recent budget, is seen as a positive step. However, Martin stressed the importance of accountability from states and local governments to ensure the investment translates into build-ready land. “Funding should be tied to clear housing outcomes, with a ‘use it or lose it’ approach to ensure delivery at pace. Builders need to see this investment convert into serviced land, faster approvals and projects ready to commence,” she urged.

Further, the government’s $40 million investment in innovation and modern methods of construction (MMC) has been praised as support for the increased use of prefabrication and modular construction. “We see the willingness of builders to innovate and investigate new methods of construction, but support is needed to make ideas feasible and improve productivity,” Martin said.

An inquiry led by the Productivity Commission will examine the rules and regulations impacting housing supply, land use, and infrastructure delivery. This inquiry is expected to identify opportunities for reform and drive commitment from all stakeholders involved in delivering Australian housing. “The new inquiry to be led by the Productivity Commission into the rules and regulations that impact housing supply, land use, and the delivery of infrastructure will identify opportunities for reform. Better understanding will drive commitment and more action from everyone that plays a part to deliver Australian housing,” Martin explained.

Despite these efforts, the HIA has cautioned against changes to investor tax settings that could undermine broader supply-side reforms. “At a time when governments are working to increase supply, policy settings must reinforce that objective – not work against it,” Martin warned. “Private investment is critical to delivering new housing. Any reduction in investor confidence risks fewer projects, delayed delivery and reduced supply.”

Meeting housing targets hinges on restoring project viability, according to the HIA. “Targets and ambition don’t build homes – feasible projects do. Addressing costs, delays and productivity is essential to ensure projects proceed and supply is sustained,” Martin concluded. “Industry stands ready to work with all levels of government to remove barriers and deliver more homes for Australians.”